Tracking the IT budget's upward curve

By Kevin Plexico

Jun 04, 2012

In 1987, the federal government's IT budget was less than $17.7 billion. There were no government websites — there were no websites at all — but the Defense Department, NASA, the National Science Foundation and the Energy Department were each funding small research projects that would contribute to the development of the Internet.

Today, the federal IT budget stands at nearly $76 billion. There are so many U.S. government websites that no one seems to have an official count. And IT services alone accounted for more than $16 billion of sales on General Services Administration schedules in the past fiscal year.

Up and up — and up?

Although we’ve seen many advances in technology, the spending picture for the past 25 years has been remarkably stable. The federal IT budget grew by more than 400 percent from 1987 to 2012. Some industries went on roller coaster rides, but federal IT had a fairly simple upward trajectory. It saw a handful of double-digit spikes but never dropped by more than 2 percent in any given year.

There were obvious drivers for the spending hikes. For example, the Year 2000 conversion spurred a 17 percent increase in federal IT spending from 1998 to 1999. In the aftermath of the 2001 terrorist attacks, IT spending grew by an average of 11 percent annually from 2000 to 2003.

Given the budget environment we are in today, modest declines might become more frequent. The largest drop — less than 2 percentage points — occurred from 2010 to 2011, as economic stimulus funding ebbed, the wars in Iraq and Afghanistan drew down, and Congress passed a discretionary budget smaller than the previous year’s for the first time in 15 years.

Meet the new plan, same as the old plan

IT policies and management agendas have come and gone, usually as control of the White House changed hands. Yet the practical aim often stays the same.

The Clinton administration’s National Performance Review sought, in part, to examine issues that cut across agencies, such as personnel, procurement and budget policies. The goal was to identify problems and offer solutions and ideas for savings — not unlike the George W. Bush era lines-of-business initiatives or the Obama administration's 25-Point Implementation Plan to Reform Federal IT Management.

In the past 25 years, we’ve also seen many changes to the management of IT, most of which have served to standardize approaches across agencies. The trends are clear: The government has continually spent more on IT as IT has played an increasingly vital role in the delivery of government services. At the same time, policies and laws have sought to control the sprawling IT infrastructure with efficiency measures and, increasingly, centralized management.

It's hard to know exactly what the next 25 years will bring. Cloud computing and mobile technologies will surely spur innovations we can't foresee. But it’s a reasonable bet that the role of IT will continue to expand and drive new efficiencies and better ways to deliver government services, and the government will always work to standardize and streamline the massive amount of IT equipment and services it buys.

About the Author

Mr. Plexico came to Deltek from its acquisition of INPUT in 2010. At INPUT, Mr. Plexico played an instrumental role in helping to grow the company from a boutique market research firm to the industry leading provider of market information to government contractors.

Mr. Plexico provides thought leadership and expert opinion to industry executives and is a recognized expert on the public sector market.

Mr. Plexico earned an MBA in Information Systems from the University of Maryland, College Park, Maryland and a B.B.A. in Economics from James Madison University, Harrisonburg, Virginia.